7/8
11
TLE – H.E.- FRONT OFFICE
0 SERVICES
Quarter 1 - Module 4:
PERFORM SIMPLE CALCULATIONS
TLE – Grade 7/8
Alternative Delivery Mode
Quarter 1 – Module 4: PERFORM SIMPLE CALCULATIONS
First Edition, 2020
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7/8
TLE
FRONT OFFICE SERVICES
Quarter 1 - Module 4:
PERFORM SIMPLE
CALCULATIONS
What I Need to Know
This module was designed and written for our learners who would like to
study front office services. It is here to help to help you understand topics in
front office services. The scope of this module will help you in many different
learning situations. The language used recognizes the diverse vocabulary level
of students. The lessons are arranged to follow the standard sequence of the
course.
The module will discuss on;
Lesson 4 – Front office Formulas
After going through this module, you are expected to:
1. Perform calculations used in front office services for arrivals and
departures.
2. Familiarize formulas used in front office services for arrivals and
departures.
What I Know
Pretest: Let us determine how much you already know.
Direction: On your activity notebook fill in the table below.
What I KNOW about front office formulas What I WANT TO KNOW about front office
formulas
• •
• •
• •
• •
1
Lesson
PERFORM SIMPLE
4 CALCULATIONS
Primarily front office of a hotel is a place where guest approaches first and
thus has a chance to form impression about the hotel. It is the “face of any hotel”.
Front office takes care of allocation and distribution of rooms as per instructions
from reservations and walk in guests.
During the check out front office has to ensure the bills from point of sale are
received for the room that is checking out and that the guest settles the bill prior to
leaving the hotel.
Notes to the Teacher
This contains helpful tips or strategies that will help you in
guiding the learners. The following are information that
would lead to the activities and assessment. Some activities
may need your own discretion upon checking, or you may
use rubric of provided. Please review the activities and
answer keys, and amend if necessary.
2
What’s In
On your activity notebook, answer the following questions.
1. What are the formulas being used in front office?
My Answer: __________________________________________
______________________________________________________
What’s New
Front office department is the most important department in the hotel. It is the
nerve of the hotel and interference between the hotel and its guest. The guest makes
first contact with the front office department and its first place that makes develop an
impression about the level of service standard facilities.
So, as front office personnel, you should know the different report formats
that you will be using and you should be able to perform simple calculations in FOS.
What is It
FRONT OFFICE FORMULAS
Potential Average Rate Single and Double Rate
One of the main computation involved in the front office or revenue
management is to calculate the hotel's yield statistics. Potential Average Rate
provides the amount of revenue that would have been generated if all the rooms were
sold at their published or rack rate.
For hotels where their single rate and double rate for all room types are
same then the PAR for Single & Double will be same as their Rack rate. But in most
of the hotels the single rate changes as per room category or type. In such cases an
average single rack rate to be calculated.
3
The Formula for Potential Average Single Rate :
Potential Average Single Rate = Single Room Revenue at Published Tariff or Rack Rate
Number of Rooms sold as singles
Example 1 - Potential Avg. Single Rate (Where the single rate is same for all
room types):
Total Number of Rooms sold in Single = 25
Rack Rate / Published Tariff for Single = 125.00
Single Room Revenue at Published Tariff = 25 * 125.00
= 3125.00
Potential Avg. Single Rate for 01st Jan 2017 = 3125.00 / 25
= 125.00
Example 2 - Potential Avg. Single Rate (Where the single rate varies as per
room types):
Deluxe Room - Rack Rate / Published Tariff for Single = 125.00
Deluxe Room Number of Rooms Available in the hotel = 100
= 125.00 * 100
= 12500.00
Suite Room - Rack Rate / Published Tariff for Single = 168.00
Suite Room Number of Rooms Available in the hotel = 30
= 168.00 * 30
= 5040.00
Single Room Revenue at Published Tariff = (12500.00 + 5040.00)
= 17540.00
Potential Avg. Single Rate for 01st Jan 2017 = 17540.00 / 130
= 134.92
The Formula for Potential Average Double Rate
Potential Average Double Rate =Double room revenue at Published tariff or rack rate
Number of rooms sold as Double
4
Example 1 - Potential Avg. Double Rate (Where the Double rate is same for all
room types):
Total Number of Rooms sold in Double = 55
Rack Rate / Published Tariff for Double = 175.00
Double Room Revenue at Published Tariff = 55 * 175.00
= 9625.00
Potential Avg. Double Rate for 01st Jan 2017 = 9625.00 / 55
= 175.00
Example 2 - Potential Avg. Double Rate (Where the Double rate varies as per
room types):
Deluxe Room - Rack Rate / Published Tariff for Double = 185.00
Deluxe Room Number of Rooms Available in the hotel = 100
= 185.00 * 100
= 18500.00
Suite Room - Rack Rate / Published Tariff for Double = 215.00
Suite Room Number of Rooms Available in the hotel = 30
= 215.00 * 30
= 6450.00
Double Room Revenue at Published Tariff = (18500.00 + 6450.00)
= 24950.00
Potential Avg. Double Rate for 01st Jan 2017 = 17540.00 / 130
= 134.92
Formula For Average Guest Per Room (APR)
Average Guest Per Room (APR) - Provides the average number of guests occupied per
room in the hotel, This ratio is normally based on the total guest
in the hotel including children divided by the total number of rooms sold.
The formula for calculating Average Guest Per Room (APR) is as below:
Average Guest Per Room = Total Number of Guests
Number of Rooms Sold
Average Guest Per Room W/O C hild = Total Number of Adults
Number of Rooms Sold
5
Example 1 APR with Total Guests:
Total Guest Occupied for 12th September 2017 = 453
Total Rooms Sold for 12th September 2017 = 200
Average Guest Per Room = 453 / 200
= 2.26
Example 2 APR Without (W/O) Child:
Total Adults Occupied for 12th September 2017 = 410
Total Rooms Sold for 12th September 2017 = 200
Average Guest Per Room = 410 / 200
= 2.05
Example 3 APR with Total Guests (Monthly):
Total Guest Occupied for September 2017 = 11935
Total Rooms Sold for September 2017 = 5840
Average Guest Per Room = 11935 / 5840
= 2.04
Example 4 APR Without (W/O) Child (Monthly):
Total Adults Occupied for September 2017 = 11100
Total Rooms Sold for September 2017 = 5840
Average Guest Per Room = 11100 / 5840
= 1.9
Formula For Average Rate Per Guest (AGR)
The Average Rate Per Guest (AGR) - Provides the average revenue
contribution by each guest occupied in the hotel, This rate is normally based on every
guest in the hotel including children. Some hotels take their AGR without considering
children.
6
The formula for calculating Average Rate Per Guest (AGR) is as below :
Average Rate Per Guest = Total Room Revenue
Total Number of guests
Average Rate Per Guest W/O Child = Total Room Revenue
Total Number of Adults
Example 1 AGR with Total Guests:
Total Guest Occupied for 12th September 2017 = 453
Total Room Revenue for 12th September 2017 = 70000.00
Average Rate Per Guest = 70000 / 453
= 154.53
Example 2 AGR Without (W/O) Child:
Total Adults Occupied for 12th September 2017 = 410
Total Room Revenue for 12th September 2017 = 70000.00
Average Rate Per Guest = 70000 / 410
= 170.73
Example 3 AGR with Total Guests (Monthly):
Total Guest Occupied for September 2017 = 11935
Total Room Revenue for September 2017 = 1926000.00
Average Rate Per Guest = 1926000.00 / 11935
= 161.37
Example 4 AGR Without (W/O) Child (Monthly):
Total Adults Occupied for September 2017 = 11100
Total Room Revenue for September 2017 =1926000.00
Average Rate Per Guest = 1926000.00 / 11100
= 173.51
7
Formula to Calculate Average Room Rate (ARR) | Average Daily Rate (ADR)
ADR (Average Daily Rate) or ARR (Average Room Rate) is a measure of the
average rate paid for the rooms sold, calculated by dividing total room revenue by
rooms sold.
Some hotels calculate ARR or ADR by also including the complimentary rooms
this is called as Hotel Average Rate. By Taking the HARR the management can find
out the actual effect of complimentary stays on the average room rate.
Average Room Rate (ARR or ADR) = Total Room Revenue
Total Rooms Sold
Or
Average Room Rate (ARR or ADR) = Total Room Revenue
Total Occupied Rooms
Example 1:
Total Room Revenue for 01st Jan 2017 = 25000.00
Total Room Sold for 01st Jan 2017 = 250
ARR or ADR for 01st Jan 2017 = 25000.00 / 250
= 100
Example 2:
Total Room Revenue for 31st Dec 2016 = 95985.58 Total Room Sold for
31st Dec 2016 = 277
ARR or ADR for 31st Dec 2016 = 95985.58 / 277
= 346.52
Example 3 (Monthly ARR/ADR):
Total Room Revenue for the Month of October = 2,250,485.58
Total Room Sold for the Month of October = 5822
ARR or ADR for October = 2,250,485.58 / 5822
= 386.55
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FO Formula - Hotel Occupancy Percentage | Occupancy Ratio Calculation
Occupancy Percentage is the most commonly used operating ratio in the hotel
front office, The Occupancy percentage indicates the proportion of rooms either sold
or occupied to the number of rooms available for the selected date or period.
The Formula for Occupancy Percentage
= (Number of Rooms Occupied) / (Total Number of Rooms Available for sale) * 100
Also at some hotel Available Rooms are taken after reducing the OOO (Out of
Order Rooms) ie. Sellable Rooms = Available Rooms - Out Of Order Rooms.
Other hotels always take all rooms in their hotel as Available Rooms because this
gives a consistent base on which the occupancy is measured.
1) Example Occupancy Percentage Calculation (Based on Rooms Occupied)
Total Number of Rooms Available in the hotel = 215
Number of Rooms Occupied on 10th September 2017 = 207
Hotel's Occupancy Percentage = 207 / 215 *100
= 96.28 %
2) Example Occupancy Percentage Calculation (Based on Rooms Sold)
Total Number of Rooms Available in the hotel = 215
Number of Rooms Occupied on 10th September 2017 = 207
Total House Use and Complimentary Rooms =2
Hotel's Occupancy Percentage = (207 - 2) / 215 *100
= 95.34 %
3) Example Occupancy Percentage Calculation (Based on Available Rooms)
Total Number of Rooms in the hotel = 215
Number of Rooms Occupied on 10th September 2017 = 207
Hotel's Occupancy Percentage = 207 / 215 *100
= 96.28
4) Example Occupancy Percentage Calculation (Based on
Sellable Rooms)
Total Number of Rooms Available in the hotel =215
Number of Rooms Occupied on 10th
September 2017 = 207
Total Out of Order (OOO) Rooms =5
Hotel's Occupancy Percentage = 207 / (215 - 5) *100
= 98.57 %
9
Multiple Occupancy Ratio / Multiple Occupancy
Multiple Occupancy Percentage is used to determining the double occupancy
ratio of the hotel and to forecast food and beverage revenue, identify clean linen
requirement and also to analyze average daily room rates.
Multiple occupancy percentages can be calculated in different ways. Below are
few methods or formulas for calculating multiple occupancy ratios for your hotel.
Multiple Occupancy Percentage = (Number of Rooms Occupied by more than one
Adult or Pax)
(Total Number of Rooms Occupied)
X 100
Single Occupancy % (Occupied Rooms)
= (Number of Single Rooms Occupied) / (Total Number of Rooms
Occupied) * 100
Single Occupancy % (Available Rooms)
= (Number of Single Rooms Occupied) / (Total Number of Available rooms) * 100
Double Occupancy % (Occupied Rooms)
= (Number of double Rooms Occupied) / (Total Number of Rooms Occupied) * 100
Double Occupancy % (Availalbe Rooms)
= (Number of double Rooms Occupied) / (Total Number of Available rooms) * 100
1) Multiple Occupancy Percentage Calculation (Based on Rooms Occupied)
Total Number of Rooms with More than One Adult on 10th September 2017 = 115
Total Number of Rooms Occupied on 10th September 2017 = 207
Hotel's Occupancy Percentage = 115 / 207 *100
= 55.55 %
2) Double Occupancy Percentage Calculation (Based on Rooms Occupied)
Total Number of Rooms with Double Occupancy on 10th September 2017 = 105
Total Number of Rooms Occupied on 10th September 2017 = 207
Hotel's Occupancy Percentage = 105 / 207 *100
= 50.72 %
3) Double Occupancy Percentage Calculation (Based on Available Rooms)
Total Number of Rooms with Double Occupancy on 10th September 2017 = 105
Total Number of Available Rooms on 10th September 2017 = 210
Hotel's Occupancy Percentage = 105 / 210 *100
= 50 %
10
4) Single Occupancy Percentage Calculation (Based on Rooms Occupied)
Total Number of Rooms with Single Occupancy on 10th September 2017 = 102
Total Number of Rooms Occupied on 10th September 2017 = 207
Hotel's Occupancy Percentage = 105 / 207 *100
= 49.27 %
5) Single Occupancy Percentage Calculation (Based on Available Rooms)
Total Number of Rooms with Single Occupancy on 10th September 2017 = 105
Total Number of Available Rooms on 10th September 2017 = 210
Hotel's Occupancy Percentage = 105 / 210 *100
= 50 %
Potential Average Rate (PAR)
PAR or Potential Average Rate is a very important ratio in the revenue
management department. The Potential Avg. Rate (PAR) is a collective statistics that
combines the potential average rate, multiple occupancy percentages and the rate
spread.
The Formula for Potential Average Rat e:
Potential Average Single Rate = (Multiple Occupancy Percentage X Rate
Spread) + Potential Average Single Rate
Example 1 - Potential Avg. Rate:
There are two steps involved to calculate the potential average rate:
Step 1: Is by multiplying the Rate Spread by the hotel's Multiple Occupancy
Percentage.
Step 2: Add the result from Step 1 to hotel's Average Single Rate which will then
give the 'Potential Average Rate (PAR)'
Multiple Occupancy Percentage = 9.00
Rate Spread = 25.00
Potential Avg. Single Rate = 125.00
Potential Average Rate (PAR) = (9.00 X 25.00) + 125
= (225) + 125
= 350
Example 2 - Potential Avg. Rate:
Multiple Occupancy Percentage = 5.00
Rate Spread = 15.00
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Potential Avg. Single Rate = 105.00
Potential Average Rate (PAR) = (5.00 X 15.00) + 105.00
=(75)+ 105
= 180
Formula for calculating Revenue per Available Room
Revenue per Available Room (RevPAR) - RevPAR is one of the most important
statistics in the hotel industry. RevPAR divides the total revenue generated by the
hotel by the number of available rooms to sell (Available rooms = Total rooms in
the hotel - Out of Order rooms).
It measures in effect the revenue generation capability of the hotel. Hotels with
a large food & beverage operations and other recreational facilities have RevPAR well
above the average Daily Rate.
The downside of RevPAR is the formula only evaluates your income from room
sales ie it is not including other revenue generating areas like Food and Beverage,
Spa, Recreational facilities etc. Those hotels with fewer revenue centres have RevPAR
number closer to their ADR / ARR.
The formula for RevPAR calculation with examples:
RevPAR = Total Room Revenue / Total Number of Available Rooms for sale
Example 1:
Total Room Revenue for 01st Sep 2017 = 14,585.26
Total Available Rooms for sale 01st Sep 2017 = 258
RevPAR = 14585.26 / 258
= 56.53
Example 2:
Total Room Revenue for 30th Aug 2017 = 22,890.00
Total Available Rooms for sale 30th Aug 2017 = 257
RevPAR = 22890.00 / 257
= 89.06
Example 3 - Monthly RevPAR:
Total Room Revenue for September 2017 = 682,800.00
Total Available Rooms for sale September 2017 = 7750
RevPAR = 682,800.00 / 7750
= 88.10
12
TRevPOR (Total Revenue per Occupied Room) - Is a measure to calculate total
hotel revenue per occupied room. Which is calculated or derived from the sum of
room revenue, food and beverage (F&B) revenue, and other revenues divided by the
total occupied room.
The formula for TRevPOR calculation with examples:
TRevPOR = (Room + F&B + Other Revenue)
Total occupied rooms
Example 1:
Total Hotel Revenue for 01st Sep 2017 = 25,585.26
Total Rooms Occupied for 01st Sep 2017 = 230
TRevPOR = 25,585.26 / 230
= 111.24
Example 2:
Total Hotel Revenue for 30th Aug 2017 = 33,890.00
Total Rooms Occupied 30th Aug 2017 = 225
TRevPOR = 33,890.00 / 225
= 150.62
Example 3 - Monthly TRevPOR:
Total Hotel Revenue for August 2017 = 775,090.00
Total Rooms Occupied for August 2017 = 6820
TRevPOR = 775,090.00 / 6820
= 113.64
Formula For Calculating Room Achievement Factor AF (Rate Potential
Percentage)
The Room Achievement factor is also known as Rate Potential Percentage of a
hotel, is defined as the percentage of the Rack Rate that the hotel actually receives
by selling their rooms. Room Achievement factor is calculated by dividing the Actual
Average Rate (ARR or ADR) by the Potential Average Room Rate.
Additionally, depending upon the hotel's management policy the Actual
Average Rate is either divided by the total Rooms Sold or Occupied Rooms. Room Sold
= (Occupied Rooms - Complimentary and House use)
13
The Formula for Room Achievement Factor AF:
Room Achievement Factor = (Actual Average Rate) / (Potential Average Rate)
Example 1 - Where Actual Average Rate Taken as Rooms Sold:
Actual Average Rate = 173.00
Potential Average Rate (PAR) = 223.00
Room Achievement Factor (AF) = 173.00 / 223.00
= 0.78 or 78%
Example 1 - Where Actual Average Rate Taken as Occupied Rooms:
Actual Average Rate = 165.00
Potential Average Rate (PAR) = 223.00
Room Achievement Factor (AF) = 165.00 / 223.00
= 0.74 or 74%
The Room Rate Spread
Rate Spread is another important matrix used by revenue management team
in large hotels or by the front office manager in smaller hotel operations.
The value for rate spread is derived from various room types in the hotel in
order to make essential yield decisions by the hotel management. Rate Spread is
calculated by taking the difference between Potential Average Double Rate and
Potential Average Single Rate.
The Formula for Calculating Rate Spread:
Rate Spread = (Potential Average Double Rate) – (Potential Average Single Rate)
Example 1:
Potential Average Single Rate = 150.00
Potential Average Double Rate = 225.00
Rate Spread of the hotel = 225.00 - 150.00
= 125.00
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Example 2:
Potential Average Single Rate = 99.00
Potential Average Double Rate = 109.00
Rate Spread of the hotel = 99.00 - 109.00
= 10.00
Example 3 (Monthly Rate Spread):
Potential Average Single Rate For the Month = 129.69
Potential Average Double Rate For the Month = 158.88
Rate Spread of the hotel = 129.69 - 158.88
= 29.19
What’s More
Instruction: Answer the following questions on your notebook.
1. What are the formulas used in front office? (1 point each formula) Answers:
_______________________________________________________________
_________________________________________________________________________
2. Explain the importance of each formula discussed in this module. (5 pts per
formula)
Answers: _________________________________________________________________
___________________________________________________________________________
3. As a future front office attendant, does topics discussed in this module
important? In what way? (5 points)
Answers:__________________________________________________________________
___________________________________________________________________________
15
What I Have Learned
As a front office personnel, it is important to know the different simple
calculations that is used in FOS because front office department is the most
important department in the hotel. It is the nerve of the hotel and interference
between the hotel and its guest. The guest makes first contact with the front office
department and its first place that makes develop an impression about the level of
service standard facilities.
In addition, knowledge regarding formulas used in front office such as
Potential Average Rate Single and Double Rate, Formula For Average Guest Per Room
(APR), Formula For Average Rate Per Guest (AGR), Formula to Calculate Average
Room Rate (ARR) | Average Daily Rate (ADR), FO Formula - Hotel Occupancy
Percentage | Occupancy Ratio Calculation, Multiple Occupancy Ratio / Multiple
Occupancy, Potential Average Rate (PAR), Formula for calculating Revenue per
Available Room, Formula For Calculating Room Achievement Factor AF (Rate
Potential Percentage), and The Room Rate Spread are importantly needed .
WHAT I CAN DO
Direction: Write a reflection about your learning on this module using the guide
phrases below. Write it on your notebook.
I have learned that
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
I have realized that
__________________________________________________________________________________
__________________________________________________________________________________
_________________________________________________________________________________
I will apply
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
16
Rubrics
Areas of
Assessment 10 points 7 points 4 points 1 point
Presents ideas Presents ideas
in an original in a Ideas are too Ideas are vague
manner consistent general or unclear
Ideas
manner
Organization Strong and Organized Some No
organized beg/mid/end organization; organization;
beg/mid/end attempt at a lack
beg/mid/end beg/mid/end
Understanding Writing shows Writing shows Writing shows Writing shows
strong a clear adequate little
understanding understanding understanding understanding
Mechanics Few (if any) Few errors Several errors Numerous
errors errors
Assessment
Instructions: On a short bond paper, Calculate the following. Show your solutions
in each item.
1. Compute for Potential Avg. Single Rate (Where the single rate is same
for all room types):
Given:
Total Number of Rooms sold in Single = 50
Rack Rate / Published Tariff for Single = 205.00
2. Compute for Potential Avg. Single Rate (Where the single rate varies as
per room types)
17
Given:
Deluxe Room - Rack Rate / Published Tariff for Single = 135.00
Deluxe Room Number of Rooms Available in the hotel = 200
Suite Room - Rack Rate / Published Tariff for Single = 150.00
Suite Room Number of Rooms Available in the hotel = 30
3. Compute for Potential Avg. Double Rate (Where the Double rate is
same for all room types)
Given:
Total Number of Rooms sold in Double = 60 Rack
Rate / Published Tariff for Double = 185.00
4. Compute for APR with Total Guests
Given:
Total Guest Occupied for 12th September 2017 = 625
Total Rooms Sold for 12th September 2017 = 300
5. Compute for AGR with Total Guests
Given:
Total Guest Occupied for 12th September 2017 = 523
Total Room Revenue for 12th September 2017 = 90000.00
6. Compute for Average Room Rate (ARR or ADR)
Given:
Total Room Revenue for 01st Jan 2017 = 30000.00 Total
Room Sold for 01st Jan 2017 = 250
7. Compute for Occupancy Percentage
Given:
Total Number of Rooms Available in the hotel = 315
Number of Rooms Occupied on 10th September 2017 = 307
8. Compute for Multiple Occupancy Percentage
Given:
Total Number of Rooms with More than One Adult on 10th September 2017 = 215
Total Number of Rooms Occupied on 10th September 2017 = 307
9. Compute for Single Occupancy Percentage (Based on Available
Rooms)
18
Given:
Total Number of Rooms with Single Occupancy on 10th September 2017 = 100 Total
Number of Available Rooms on 10th September 2017 = 200
10. Compute for Potential Avg. Rate
Given:
Multiple Occupancy Percentage = 10.00
Rate Spread = 30.00
Potential Avg. Single Rate = 135.00
11. Compute for Revenue per Available Room (RevPAR)
Given:
Total Room Revenue for 01st Sep 2017 = 15,989.00
Total Available Rooms for sale 01st Sep 2017 = 315
12. Compute for Total Revenue per Occupied Room
Given:
Total Hotel Revenue for 01st Sep 2017 = 24,353.30
Total Rooms Occupied for 01st Sep 2017 = 130
13. Compute for Actual Average Rate Taken as Rooms Sold
Given:
Actual Average Rate = 163.00
Potential Average Rate (PAR) = 213.00
14. Compute for Average Rate Taken as Occupied Rooms
Given:
Actual Average Rate = 155.00
Potential Average Rate (PAR) = 213.00
Additional Activities
Direction: Now that you already know the different forms used in the hotel at the
front office. Do this activity on your notebook.
1. Enumerate formulas used in front office.
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Answer Key
Assessment
References
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[Link]
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training/[Link]
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For inquiries or feedback, please write or call:
Department of Education – Schools Division of Negros Oriental
Kagawasan, Avenue, Daro, Dumaguete City, Negros Oriental
Tel #: (035) 225 2376 / 541 1117
Email Address: [Link]@[Link]
Website: [Link]
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